While there are differences between regions, most of the systematic regional disparities can be explained by differences in urbanization rates across the regions; namely, relatively more urbanized regions tend to have a higher per capita gross value added, a more diverse and sophisticated economic structure, and a better developed infrastructure.

We may recall that the Lazika city project has been proposed by the Saakashvili administration to accelerate the process of urbanization. A new city was suggested as a means of absorbing surplus rural population and thus paving the way for land consolidation and greater productivity in agriculture.

Growth Diagnostics project applies the well-known methodological framework to uncover the binding constraints to economic growth in Georgia. The aim of this research project was to analyze all potential areas of economic reform in Georgia from credit markets to human capital to infrastructure; and thus produce a comprehensive assessment of reform priorities.